In Bacani v Fiber Textile Manufacturing Corporation (G.R. 271518, 30 September 2025), the Supreme Court, through Associate Justice Amy Lazaro-Javier, drew an important line between a legitimate business response to economic challenges and an unlawful diminution of employees’ rights. 

The Court ruled that the unilateral imposition of reduced workdays and worker rotation schemes may amount to constructive dismissal when undertaken without compliance with legal requirements.

The case involved rank-and-file employees who had been working six days a week. Without their consent, their schedules were drastically reduced to only two to three working days weekly. 

Unsurprisingly, the reduction resulted in a corresponding decrease in their earnings. Believing that they had effectively been deprived of meaningful employment, they filed a complaint for constructive dismissal.

The employer defended its actions by invoking management prerogative. According to the company, the reduction in workdays was necessitated by a shortage of raw materials. It likewise pointed to an internal memorandum announcing the implementation of a work-rotation arrangement. The company maintained that the measure was a temporary and reasonable response to operational difficulties.

The Labor Arbiter ruled in favor of the employees, finding that they had been constructively dismissed. The ruling emphasized that the company failed to comply with Department of Labor and Employment (DoLE) Department Advisory 2, Series of 2009, which governs flexible work arrangements. The Labor Arbiter also found no substantial evidence supporting the alleged shortage of raw materials.

Although the National Labor Relations Commission and the Court of Appeals later reversed the Labor Arbiter and sustained the employer’s actions as a valid exercise of management prerogative, the Supreme Court ultimately reinstated the employees’ victory.

In doing so, the Court reiterated a fundamental principle in labor law: while employers possess the prerogative to regulate all aspects of employment, such prerogative is not absolute. It must always be exercised in good faith, for legitimate business reasons and with due regard for the rights and welfare of workers. 

Management prerogative cannot be used as a shield to justify measures that effectively deprive employees of their means of livelihood.

The Court emphasized that a valid flexible work arrangement must satisfy several requirements. It must be expressly and voluntarily supported by a majority of the affected employees, be temporary in nature, be accompanied by prior notification to the appropriate DoLE Regional Office, and be adopted in good faith to address actual or reasonably imminent economic difficulties or national emergencies.

The employer failed on several fronts. There was no meaningful consultation with the affected workers; they were merely informed through a company memorandum. No prior notice was given to the DoLE Regional Office. 

More significantly, the company failed to establish the existence of actual or imminent economic distress sufficient to justify the arrangement. Its alleged shortage of raw materials turned out to be temporary and was eventually resolved through new orders.

The ruling is a timely reminder that flexible work arrangements, while recognized under our labor laws, are not blank checks that employers may invoke at will. Flexibility must operate within the bounds of fairness, transparency, and legal compliance. Reduced workdays may appear to be a practical business solution, but when implemented unilaterally and without sufficient justification, they can become the legal equivalent of dismissal.

As Bacani teaches, less work and less pay, when imposed without a lawful basis, may ultimately mean less legal protection for the employer. The law permits flexibility, but it insists on fairness.